SAN FRANCISCO--Microsoft Senior Vice President Satya Nadella said on Tuesday that he is pleased that Bing has gained nearly 5 percentage points of market share in its first year, but said he is not kidding himself into thinking that is a victory.

"None of us are confused," Nadella said. "We are a low-share player."

Microsoft now has double-digit market share, but barely, said Nadella, who heads up engineering efforts in the company's Online Services Division. Still he said the company has made progress on nearly every metric since launching Bing a year ago. In addition to gaining share, Nadella noted that 64 percent of people have what is known as "unaided awareness" of Bing--basically it means they actually know what it is and can name it--something that wasn't the case with Live Search, Microsoft's prior search brand.

Nadella's comments came at the start of a search event at Microsoft's sales office here and as the latest ComScore numbers show Bing continuing to gain share, even if you take out some dubious queries, such as slideshows.

Microsoft isn't announcing a lot of new things at this event, but it is talking for the first time about plans for a Bing Android client as well as new mapping features and a new TV listings feature that is in testing and about to launch.

The Bing event is just getting started. I'll have more coverage as the event continues.

Update 10:50 a.m. PDT: Microsoft's Brian Macdonald showed a brief preview of some other features Bing is working on, but they were shown in rapid fire and with the proviso that no one take pictures or video. Here's what I was able to glean in between blinks: Microsoft is working on incorporating pictures and video into more types of searches; the company will add more gaming and entertainment-specific pages as well as potentially add some more data onto its home page, which is today dominated by a search bar and a background image.

Now Harry Shum is talking about how Bing is trying to shift to a dialog model in which it is having more of a conversation with the user about what it is that they are looking for, recognizing that it is often still hard to know what the user is searching for, even as the engine uses more cues such as location and history to augment results. (I'll have a lot more on this subject in a follow-up story I am working on for Wednesday.)

Harry Shum shows how Bing is trying to do a better job of sorting results.
Ina Fried/CNET

11:15 a.m.: One of the things Microsoft is trying to do is automate the task of refining the query.

A lot of searches, Microsoft said, are actually people trying to compare two things and this is an area that Bing expects to offer a lot more of over the next six months.

Already they are testing some options. For example, Microsoft notes that if one searches Seattle Mariners, they get the option of comparing the Mariners to the Yankees. (However, Mariners fans will find more pleasing results if they compare the team to the Houston Astros instead.)

In testing, the result of adding comparisons and other suggestions, Microsoft said, has been a drop in the number of users having to manually redo their query, something Microsoft says is a sign that its efforts to better sort results are working.

A lot of times when a user is searching, Microsoft says, what they really want is to compare two things. Although Bing is still working to add comparison, here's an early example of how to compare two things, in this case the Yankees and Mariners.
Ina Fried/CNET

11:25 a.m.: Erik Jorgensen is on to talk mobile search. He starts by talking about the challenges of mobile search--namely that it is hard to type. Personally, he said he feels like Edward Scissorhands typing on a cell phone.

As a result, he said the company has a motto when it comes to mobile of "Type less. Do more."

The company's focus is a split between developing native applications for key platforms and then having a good mobile search page for the rest. Jorgensen said that there have been 4 million downloads of the iPhone app (and, as Nadella noted earlier, the company is now working on an Android client).

Overall, mobile search queries have been up 160 percent year over year, although that's off a pretty small base, Jorgensen concedes.

On the mapping front, the company has seen its unique users grow 41 percent, Jorgensen said.

11:45 a.m.: Blaise Aguera y Arcas showed some things that are coming in mobile and mapping. One interesting area he showed was merging traditional mapping with maps provided by businesses or the community. For example, he showed how Seattle's Woodland Park Zoo would look on traditional Bing Maps as well as once the site has integrated the zoo's own attraction-based map of its facilities.

Microsoft showed how a business-provided map, such as this attraction map of Woodland Park Zoo, can augment traditional map results
Ina Fried/CNET

Shifting to mobile, he showed how HTML5 is allowing the mobile search site to do things like infinite scrolling of images that were once possible only on the desktop or in an application.

Phone apps are still important, he said, for things like augmented reality, such as scanning bar codes with the camera.

Aguera y Arcas also offered a brief preview of a forthcoming Samsung Android device that will have Bing's maps and search built in, although Aguera y Arcas covered up the carrier, so I'm not sure which network will be featuring that phone.

Working on the Yahoo integration is the key focus for the search team right now, Nadella said. "All our day jobs are really that," he said. Mobile search, meanwhile, is still at Yahoo's option, Nadella said.

As for the cost at which Microsoft has made its share gains, Nadella acknowledged that he has had to spend a lot to get in the search game. "For sure we had to ante up significant dollars to break through," he said. However, Nadella said that those dollars are starting to pay off as even users that come in through toolbar and other business deals are staying and continuing to search on the site. "We clearly understand that ultimately the product has to carry the day."

Next to traffic from MSN, distribution deals are still the biggest source of traffic for Bing, but the company is also getting some more people to go directly to the Bing Web site, something that wasn't happening to any large degree with Live Search.

It's "night and day," Nadella said.

Also of note, the company is keeping more of the users that it is paying to acquire through distribution deals it has with PC makers like Dell and HP. Nadella said that, while there is churn throughout the industry, more people are adding Bing as a new default or secondary source than are choosing to drop Bing.

12:23 p.m.: As for the coming year, Nadella said he'd consider it a heroic year if Microsoft could gain as much market share in the coming year as it did in its first year. He declined to talk about profitability, but it's fair to say that the search business will continue to lose money for some time.

Nadella said that the business could become profitable if it took out tons of cost, but its goal is to gain share, with the implication that doing that requires pricey investments such as the distribution deals and advertising that Microsoft has done. "We want obviously to grow this to be a big business," Nadella said.

12:30 p.m.: As for the picture on the front of Bing, Microsoft said it has gotten only a few requests in a year to have a plain white page. That compares to Google, which had a brief experiment using a Bing-like background picture but took it down after users complained.

Microsoft's Brian Macdonald noted that Bing put a lot of engineering work into making sure its picture doesn't slow down searching. "You can't just slap a picture on it."

Nadella declined to swing at a softball when asked if that experiment was a sign Google sees Microsoft as more of a threat.

"Do we think they take us more seriously?" Nadella said. "It's a good question to ask them. if I were them, I would not admit to it."

About the author

During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina.
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